Understanding Section 80GG: A Tax Deduction for Rent Paid

Are you a salaried individual who pays house rent but does not receive any HRA benefits from your employer? If yes, then you may be eligible for tax benefits under Section 80GG of the Income Tax Act, 1961. It allows taxpayers to claim a deduction for rent paid even if they do not receive HRA.

Read more
Save Tax
Upto ₹46,800 Under Sec 80C
Best Tax Saving Plans
  • High Returns

    Get Returns as high as 17%*
  • Zero Capital Gains tax^

    unlike 10% in Mutual Funds
  • Save upto Rs 46,800

    in Tax under section 80 C
We are rated~
rating
58.9 Million
Registered Consumer
51
Insurance Partners
26.4 Million
Policies Sold
Get Instant Tax Receipts
Save upto ₹46,800 in Taxes Under Section 80C
+91
Secure
We don’t spam
View Plans
Please wait. We Are Processing..
Your personal information is secure with us
Plans available only for people of Indian origin By clicking on "View Plans" you agree to our Privacy Policy and Terms of use #For a 55 year on investment of 20Lacs #Discount offered by insurance company
Get Updates on WhatsApp
We are rated~
rating
58.9 Million
Registered Consumer
51
Insurance Partners
26.4 Million
Policies Sold

What is Section 80GG?

Section 80GG is a provision under the Income Tax Act that allows a taxpayer or an assessee to claim a deduction for the rent paid towards his/her accommodation. The deduction can be claimed by all individuals – salaried or self-employed, including those without any income. The provision helps individuals reduce their overall tax liability.

Who is Eligible for a Section 80GG Tax Deduction?

Any assessee who pays rent for his/her accommodation but does not receive any HRA from his/her employer can claim a deduction under Section 80GG. However, the following conditions must be fulfilled:

  • The assessee should not own any residential property at the place of his/her employment or business.

  • The individual, their spouse or minor child should not own any residential property at any other place.

  • The individual must not claim HRA deduction under other IT sections.

What Is the Total Amount Adjusted for Deduction Under Section 80GG?

The amount of deduction claimed under Section 80GG is subject to the following conditions:

  • The maximum deduction that can be claimed is Rs. 2,000 per month or 25% of the total income, whichever is less.

  • The rent paid should be in excess of 10% of the total income.

The term “total income” refers to the income earned by the assessee from all sources, including salary, business, and other sources.

Advantages of Section 80GG

One of the main advantages of Section 80GG is that it provides a tax deduction for individuals who do not receive HRA but pay rent for their accommodation. It is particularly beneficial for people with low income or who are at the start of their careers. It further helps reduce tax liability and save more.

Both salaried and self-employed individuals can claim a tax rebate, including those who do not earn.

Disadvantages of Section 80GG

One of the main disadvantages of Section 80GG is that the maximum deduction that can be claimed is limited to Rs. 2,000 per month or 25% of the total income, whichever is less. The tax benefit provided by this section may be relatively small for individuals with higher incomes or those who pay high rent.

Another disadvantage of Section 80GG is that the rent paid must be in excess of 10% of the total income. It means that individuals paying a low rent or with a high income may not be eligible for this tax deduction.

It is important to note that individuals claiming a deduction under Section 80GG cannot receive tax rebate under other sections for the same rent paid.

Invest & Save upto ₹46,800 per annum in taxInvest & Save upto ₹46,800 per annum in tax

How To Claim Deduction Under Section 80GG?

To claim a deduction under Section 80GG, the individual must file Form 10BA along with the income tax return.

The following information is mandatory to fill in the form:

  • House rent amount

  • Complete address of landlord and assessee

  • Rental period

  • Rent receipts/proof of rent paid

  • Basic information of assessee and landlord – name and contact information

Keep other documents like rental agreement and govt-issued ID cards handy if required while filing the claim. In addition, always ensure that the rent paid is not reimbursed by the employer.

In Conclusion

Section 80GG is a beneficial provision for individuals who do not receive HRA benefits. Individuals can also consult a finance professional to claim deductions and increase savings. However, it is important to meet all conditions under this section to receive the necessary tax rebate.

FAQ's

  • Is Section 80GG applicable to salaried individuals? 

    Any individual who pays rent for his/her accommodation but does not receive HRA from his/her employer can claim a deduction under Section 80GG. However, certain conditions must be fulfilled, such as not owning any residential property at the place of employment or business.
  • What is the limit for Section 80GG? 

    The maximum tax rebate under Section 80GG is Rs. 2,000 per month or 25% of the total income, whichever is less. The rent paid should also be in excess of 10% of the total income.
  • Can I claim a deduction under Section 80GG and HRA at the same time? 

    No, an individual cannot claim a deduction under Section 80GG and also claim HRA for the same period.
  • Is there any difference in the tax treatment of HRA and deduction under Section 80GG? 

    Yes, there is a difference in the tax treatment of HRA and deduction under Section 80GG. HRA is a part of the salary and is taxable if it exceeds the exempt limit. On the other hand, the deduction under Section 80GG is a separate deduction from the taxable income that further helps reduce your overall tax liability.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

Income Tax articles

Recent Articles
Popular Articles
Withholding Tax

02 Jul 2024

Withholding tax, also known as Tax Deducted at Source (TDS) in
Read more
Section 80EEA - Deduction for Interest on Home Loan

05 Jun 2024

Section 80EEA of the Income Tax Act provides a significant tax
Read more
Section 80CCE of the Income Tax Act

29 May 2024

Section 80CCE of the Income Tax Act provides taxpayers with
Read more
Section 80CCC of the Income Tax

06 May 2024

Section 80CCC, part of the broader 80C category in the Income
Read more
Income Tax Proof

28 Feb 2024

Income tax proofs play an important role during tax assessment
Read more
Deductions in New Tax Regime Under Union Budget 2023-24
  • 14 Feb 2020
  • 39252
There are no major changes made when it comes to deductions in the new tax regime under the recent Union Budget
Read more
What is Form 16 & How to Download It
  • 17 Jan 2017
  • 215182
Form 16 is a crucial document in India for salaried individuals. Issued by your employer, it acts as a bridge
Read more
Leave Encashment Tax Exemption - Section 10(10AA)
  • 04 Jan 2024
  • 3387
Leave Encashment Tax Exemption under Section 10(10AA) provides a significant financial benefit for employees
Read more

top
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL